Fuel Alcohol from Grain: Energy and Dollar Balances of Small Ethanol Distilleries and their Economies of Size and Scale

Folke Dovring, Robert Herendeen, Randall Plant and Mary Anne Ross

No 243904, Illinois Agricultural Economics Staff Paper from University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics

Abstract: We have calculated energy and economic balance for three sizes of ethanol-for-grain plants: 1) Single-farm size (10,000 gallons a year) 2) Farm-consortium size (250,000 gallons a year) 3) Industrial size gasohol plant (2.5 million gallons a year). Energy results are based on actual measurements during operation. Economic balances are also based on empirical materials requirements, but prices for these requirements are treated generically (e.g. we use an average price of grain, even though at least one plant studied is currently purchasing surplus seed grain at a low price. Use of energy (direct energy plus the "energy cost of energy") decreases with increasing plant size, varying between 89 thousand and 36 thousand· Btu per gallon of ethanol. Inclusion of indirect energy does not reverse this conclusion. There are also some economies of size in money terms, but these are variously offset by the price advantage which farm level operations have both in acquiring grain and in utilizing feed residue. Further complications arise from labor costs which tend to be more flexible on small than on large plants.

Keywords: Crop Production/Industries; Environmental Economics and Policy (search for similar items in EconPapers)
Pages: 63
Date: 1980-12
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Persistent link: https://EconPapers.repec.org/RePEc:ags:illusp:243904

DOI: 10.22004/ag.econ.243904

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